Evolv Technologies Reports 37% Revenue Growth to $27.4 Million in Q3 2024

Evolv Technologies Holdings, Inc. reported a total revenue of $27.4 million for the third quarter of 2024, marking a 37% increase from $20 million in the same period last year. The revenue breakdown included $1.3 million from product sales, $17.9 million from subscription services, $6.1 million from service revenue, and $2 million from license fees and other sources. Despite the revenue growth, the company recorded a net loss of $30.4 million for the quarter, compared to a net income of $5 million in the prior year, primarily due to increased operating expenses and changes in fair value of contingent liabilities.

In terms of operational metrics, Evolv's total assets decreased to $278.5 million as of September 30, 2024, down from $297.1 million at the end of 2023. The company’s cash and cash equivalents also saw a decline, falling to $46 million from $67.2 million. The decrease in cash was attributed to cash outflows from operating activities, which totaled $34.1 million for the nine months ended September 30, 2024, compared to $6.7 million in the same period last year. The company’s employee headcount increased to 300, reflecting ongoing investments in talent to support growth.

Evolv announced the launch of its new product, Evolv eXpedite™, an AI-based weapons detection system, during the third quarter. This product is designed to enhance security measures at various venues and is part of the company's broader strategy to integrate advanced technology into its offerings. The company continues to focus on expanding its market presence, particularly in the security technology sector, which is experiencing increased demand for innovative solutions.

The filing also highlighted significant changes in the company's financial reporting due to an investigation into sales practices that led to the restatement of prior financial results. The investigation revealed that certain sales were subject to extra-contractual terms affecting revenue recognition, prompting a reevaluation of the company's accounting practices. As a result, Evolv has implemented new leadership and made organizational changes to enhance compliance and oversight.

Looking ahead, Evolv Technologies anticipates continued revenue growth driven by the adoption of its new product offerings and an expanding customer base. However, the company also cautioned that it expects to incur losses in the near term as it invests in growth initiatives and navigates the complexities of the evolving market landscape. The company maintains a cautious outlook, emphasizing the need for strategic capital management to support its operational and developmental needs.